* Price cut by 3.5 pct in New Delhi
* Second cut this month after 11 pct increase in May
(Adds details, quote)
NEW DELHI, June 28 India's state-run fuel
retailers will cut gasoline prices by 2.46 rupees ($0.04) per
litre from Friday, Indian Oil Corp said, responding to
softer global oil and petrol prices.
A litre of gasoline will cost 67.78 rupees in the capital
New Delhi, state-run IOC, the country's biggest fuel retailer,
said in statement on Thursday. The reduction is the equivalent
of a 3.5 percent price cut.
The cut, the second in a row this month, comes after
gasoline prices were raised by a record 11 percent in May - the
first revision in prices for about six months.
The increase triggered a public outcry and a political
backlash in a country suffering from high inflation, even though
petrol accounts for only about 10 percent of total fuel
India liberalised petrol prices in June 2010 but the
government continues to influence refiners who in April
threatened a hefty increase if the government did not compensate
them for losses incurred on sales.
India's three state-run fuel retailers - IOC, Bharat
Petroleum Corp and Hindustan Petroleum Corp
- tend to move their prices together.
"(Retailers) continue to closely monitor the international
oil prices and the evolving scenario in USD-INR (dollar-rupee)
exchange rates to assess their potential impact on selling
prices in future," IOC said in a statement.
The decrease in other states would vary depending on local
taxes, the company added.
Every one rupee fall in the value of the Indian currency
against the dollar requires an increase of 0.77 rupees per litre
in retail gasoline prices, while every dollar fall in delivered
prices of Singapore gasoline should mean a 0.34 rupees decrease.
Softening Singapore gasoline prices GL92-SIN and global
oil prices have partially offset the impact of a
declining rupee which increases input costs for
refiners, offering the window for the price cut.
Diesel, which accounts for more than 40 percent of fuel
demand, poses greater dilemmas for the world's fourth-biggest
oil importer, as any increase would fuel inflation at a time
when Asia's third-biggest economy is slowing down.
Heavy subsidies on the fuel have led to a surge in demand
for diesel powered cars, prompting calls from some government
officials to impose a tax on the vehicles.
($1 = 57.1862 Indian rupees)
(Reporting by Nidhi Verma and Ratnajyoti Dutta; Editing by